In January 2019, Olivia took over an old factory with the intention of renovating it and operating
Question:
In January 2019, Olivia took over an old factory with the intention of renovating it and operating it as a trampoline park. Olivia entered into two contracts; One with William to do all of the plastering and one with Hamzah to complete the painting.
Both William and Hamzah were promised payment from Olivia of £10,000 each. Olivia paid them both £1,500 when they started the work and agreed on completion date of 1 April 2019. Olivia had advertised a grand opening for the trampoline park for 15th April and had taken several party bookings.
At the end of February, William advised Olivia that he would not be able to complete the plastering in time unless the overall payment for the work was increased to £12,000. Olivia agreed to pay this to ensure the job was done in time as she had taken bookings on the assumption the trampoline park would be open.
Olivia also increased Hamzah’s overall payment by the same amount in the interests of fairness.
William and Hamzah both completed the work on time. However, Olivia is now refusing to pay them the extra amount she promised. In the context of contract law, explain and advise William and Hamzah if they have any rights to enforce Olivia’s promise for extra payment.
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates